Insights on Section 8 as a landlord/Investor
Rental Property Investor · Los Angeles, CA · Member since 2020 · 32 posts · 28 votes
Insights on Section 8 as a landlord/Investor
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Real Estate Broker · Hyde Park Tampa, FL · Member since 2019 · 2k+ posts · 3k+ votes
3ySome of my clients target a portion of their portfolios to SFH for rental to Section 8 tenants. Not all Housing Authorities operate the same way so it pays to interview them (county office versus city). What has worked for my clients with Section 8 has been:
1. Rehabbing the houses as any other rental - new flooring, granite, etc. And, expecting the tenant to maintain it in that condition by actually teaching them how to do it (the right cleaners, etc). Photos are taken a move-in and the tenant signs each acknowledging condition; they are given a copy for their records (and many use the photos as bragging rights with their friends and family).
2. Tenants are screened like any other; any past eviction is a deal breaker as is any criminal behavior. What's different from non-Section 8 to Section 8 is the credit score; many of these candidates have no credit history at all so the score is low (versus being low due to non-payment).
3. We look for tenants who are employed - most are single parent households, where the mother is a nurse/caregiver, and there are 2 or 3 children who are in school or even in college. We don't want those folks who have nothing to do so they do nothing good while hanging out full time in the property. We look at it as a 'hand up' versus a 'hand out' opportunity.
4. Security deposit and renter's insurance are required. There is no grace period on rent...it is due on the 1st and if not paid on the 1st, their caseworker will be notified on the 2nd that eviction for non-payment of rent should commence.
5. Inspections are at least semi-annually. No lease is renewed until the property is inspected. Section 8 will also inspect the property pre-tenancy and annually). Tenants are required to report maintenance issues, maintain the yard, pay utilities and for pest control.
Inherited Section 8 Tenants (those that came with the purchase of a property) have not been the best and we part with those quickly. But every tenant acquired and screened as stated above have been long-time, multiple year tenants - with several who worked their way out of the program to become financially independent (celebrate that!) and remained on as tenants.
Know the program, know the caseworker, meet all the deadlines - including the short window to request rent increases annually - and it's a 'do good' with a great ROI (since our city office pays market rent - and sometimes higher - for a SFH) while providing the landlord with a more secure cash flow source.
Hope this helps...
34 Replies
- Real Estate Broker · Hyde Park Tampa, FL · Member since 2019 · 2k+ posts · 3k+ votes3y
Some of my clients target a portion of their portfolios to SFH for rental to Section 8 tenants. Not all Housing Authorities operate the same way so it pays to interview them (county office versus city). What has worked for my clients with Section 8 has been:
1. Rehabbing the houses as any other rental - new flooring, granite, etc. And, expecting the tenant to maintain it in that condition by actually teaching them how to do it (the right cleaners, etc). Photos are taken a move-in and the tenant signs each acknowledging condition; they are given a copy for their records (and many use the photos as bragging rights with their friends and family).
2. Tenants are screened like any other; any past eviction is a deal breaker as is any criminal behavior. What's different from non-Section 8 to Section 8 is the credit score; many of these candidates have no credit history at all so the score is low (versus being low due to non-payment).
3. We look for tenants who are employed - most are single parent households, where the mother is a nurse/caregiver, and there are 2 or 3 children who are in school or even in college. We don't want those folks who have nothing to do so they do nothing good while hanging out full time in the property. We look at it as a 'hand up' versus a 'hand out' opportunity.
4. Security deposit and renter's insurance are required. There is no grace period on rent...it is due on the 1st and if not paid on the 1st, their caseworker will be notified on the 2nd that eviction for non-payment of rent should commence.
5. Inspections are at least semi-annually. No lease is renewed until the property is inspected. Section 8 will also inspect the property pre-tenancy and annually). Tenants are required to report maintenance issues, maintain the yard, pay utilities and for pest control.
Inherited Section 8 Tenants (those that came with the purchase of a property) have not been the best and we part with those quickly. But every tenant acquired and screened as stated above have been long-time, multiple year tenants - with several who worked their way out of the program to become financially independent (celebrate that!) and remained on as tenants.
Know the program, know the caseworker, meet all the deadlines - including the short window to request rent increases annually - and it's a 'do good' with a great ROI (since our city office pays market rent - and sometimes higher - for a SFH) while providing the landlord with a more secure cash flow source.
Hope this helps...
- Member since 2023 · 216 posts · 133 votes3y
Some people love section 8 as investors, for the most part the monthly rent is pretty much guaranteed, others hate it as they say it is a hassle with all the inspections and most of the tenants are less than desirable.
I personally have never dealt with section 8, though did have a friend that warned me to never get involved in it and had others say they only deal with section 8...
- Austin, TX · Member since 2019 · 5k+ posts · 5k+ votes3y
Quote from @Patricia Steiner:
Some of my clients target a portion of their portfolios to SFH for rental to Section 8 tenants. ....
Hi Patricia,
Nice post...
What do you do about:
[1] Large menacing sharp toothed attack dogs that live in the backyard on a chain (or inside the house)?
[2] Off the record shack-ups-- (ie), b/f is in the unit as a home, his clothes in closet, but Section-8 has no clue to him being there?
[3] Allowing the unit to slip into a condition of filth and very heavy wear and tear?
[4] Renting out rooms (with a mattress on the floor) as a flop house--subletting while still living there to gain extra spending money.
[5] Criminal activity by 'friends" (who do not live there) who come to visit 24/7-365, aka dope pedaling to cars out front? (as the renter may be under duress to allow it, afraid of the peddlers, and will not want the police involved due to retribution).
Do you just fail to notice this and collect the rent; or try to counsel them or (???) - Rental Property Investor · Los Angeles, CA · Member since 2020 · 32 posts · 28 votes3y
Quote from @Scott Mac:
Quote from @Patricia Steiner:
Some of my clients target a portion of their portfolios to SFH for rental to Section 8 tenants. ....
Hi Patricia,
Nice post...
What do you do about:
[1] Large menacing sharp toothed attack dogs that live in the backyard on a chain (or inside the house)?
[2] Off the record shack-ups-- (ie), b/f is in the unit as a home, his clothes in closet, but Section-8 has no clue to him being there?
[3] Allowing the unit to slip into a condition of filth and very heavy wear and tear?
[4] Renting out rooms (with a mattress on the floor) as a flop house--subletting while still living there to gain extra spending money.
[5] Criminal activity by 'friends" (who do not live there) who come to visit 24/7-365, aka dope pedaling to cars out front? (as the renter may be under duress to allow it, afraid of the peddlers, and will not want the police involved due to retribution).
Do you just fail to notice this and collect the rent; or try to counsel them or (???)This brings up a very valid point, but would this not be the responsibility of the landlord/management company? Most these issues should be strictly mentioned on the lease agreement and strictly enforced by the management company. At the same time if I as the landlord did my tenant screening aggresivly most these issues should not come up. If they do however, I would most likely report it to the Housing Authority/Tenants Counselor. At the end of the day these tenants are on a voucher, I doubt they would continue mistreating the home and breaking the lease agreement because if they lose out on their voucher, they are barred for good from getting another one. Please correct me if I am wrong here - again I'm new at this and actively learning so this is a good topic to bring up and one that is important to keep in mind for any investor getting into Section 8 investing.
- Rental Property Investor · Los Angeles, CA · Member since 2020 · 32 posts · 28 votes3y
Quote from @Chris Merchant:
Some people love section 8 as investors, for the most part the monthly rent is pretty much guaranteed, others hate it as they say it is a hassle with all the inspections and most of the tenants are less than desirable.
I personally have never dealt with section 8, though did have a friend that warned me to never get involved in it and had others say they only deal with section 8...
Thanks for your input. It certainly seems like one of those strategies that could be hit and miss. I think the "hit and miss" factor really depends on how much effort a landlord would put into their due diligence in finding a tenant, processes they have in place, and the type of property manager they hire. Being strict rather than more lenient seems to be very important in a strategy like this.
- Rental Property Investor · Los Angeles, CA · Member since 2020 · 32 posts · 28 votes3y
Quote from @Patricia Steiner:
Some of my clients target a portion of their portfolios to SFH for rental to Section 8 tenants. Not all Housing Authorities operate the same way so it pays to interview them (county office versus city). What has worked for my clients with Section 8 has been:
1. Rehabbing the houses as any other rental - new flooring, granite, etc. And, expecting the tenant to maintain it in that condition by actually teaching them how to do it (the right cleaners, etc). Photos are taken a move-in and the tenant signs each acknowledging condition; they are given a copy for their records (and many use the photos as bragging rights with their friends and family).
2. Tenants are screened like any other; any past eviction is a deal breaker as is any criminal behavior. What's different from non-Section 8 to Section 8 is the credit score; many of these candidates have no credit history at all so the score is low (versus being low due to non-payment).
3. We look for tenants who are employed - most are single parent households, where the mother is a nurse/caregiver, and there are 2 or 3 children who are in school or even in college. We don't want those folks who have nothing to do so they do nothing good while hanging out full time in the property. We look at it as a 'hand up' versus a 'hand out' opportunity.
4. Security deposit and renter's insurance are required. There is no grace period on rent...it is due on the 1st and if not paid on the 1st, their caseworker will be notified on the 2nd that eviction for non-payment of rent should commence.
5. Inspections are at least semi-annually. No lease is renewed until the property is inspected. Section 8 will also inspect the property pre-tenancy and annually). Tenants are required to report maintenance issues, maintain the yard, pay utilities and for pest control.
Inherited Section 8 Tenants (those that came with the purchase of a property) have not been the best and we part with those quickly. But every tenant acquired and screened as stated above have been long-time, multiple year tenants - with several who worked their way out of the program to become financially independent (celebrate that!) and remained on as tenants.
Know the program, know the caseworker, meet all the deadlines - including the short window to request rent increases annually - and it's a 'do good' with a great ROI (since our city office pays market rent - and sometimes higher - for a SFH) while providing the landlord with a more secure cash flow source.
Hope this helps...
Thank you very much for your input Patricia! I do have a few questions for you.
1) How do your clients go about knowing that there are outstanding vouchers (demand for section 8 housing) before moving forward to purchasing a home for section 8 renting? Is contacting the Housing Authority the first step before considering a property in a given county?
2) The Housing Authority posts the Fair Market Rents, but is this the actual amount that would be paid? I have heard they don't always pay that much? What dictates if that amount would be paid or not (I find this important to know when running numbers on expected cash flow)
- Member since 2023 · 216 posts · 133 votes3y
Quote from @Nathaniel K.:
Quote from @Chris Merchant:
Some people love section 8 as investors, for the most part the monthly rent is pretty much guaranteed, others hate it as they say it is a hassle with all the inspections and most of the tenants are less than desirable.
I personally have never dealt with section 8, though did have a friend that warned me to never get involved in it and had others say they only deal with section 8...
Thanks for your input. It certainly seems like one of those strategies that could be hit and miss. I think the "hit and miss" factor really depends on how much effort a landlord would put into their due diligence in finding a tenant, processes they have in place, and the type of property manager they hire. Being strict rather than more lenient seems to be very important in a strategy like this.
Correct, I have heard horror stories though where the tenant will report an "ignored issue" to section 8 and they will withhold payment and when you inquire why that is when you find out "oh the sink is clogged and the tenant said you haven't fixed the problem" and it is honestly the first time you've heard of such an issue. I can't say that is exactly true but just horror stories I've heard. It seems tenants that use section 8 seem to know all the rules and what they can and can not get away with. On the flip side I've heard that if the tenant trashes the place and you notify section 8 before you touch anything and have them inspect it or show them video/photo proof they cover anything above and beyond the security deposit. I am sure like anything there are some real crappy tenants and some really good ones.
The guy I know that loves section 8 actually has a tenant that was section 8 when he got his first duplex and ended up hiring the guy as a handy man and has had him as a tenant and handyman for years now and helped him get off section 8 all together, so there are I'm sure just as many good stories as horror stories.
Best bet may be to try and connect with landlords in the areas you're targeting and see what experiences they've had.
- Rental Property Investor · Philadelphia, PA · Member since 2018 · 260 posts · 145 votes3y
Section 8 I great but you have to be in a landlord-friendly county/city. You want to be able to evict fast and have a new section 8 tenant lines up
Thats my number 1 rule with section 8 , but overall I think its great, improves during recession ( recession proof), won't ever go away (govt) , and direct deposits...I find if you treat them good they will treat you well but you need to know when to put the foot down
- 3yJohn MorganPro MemberRental Property Investor · Grand Prairie, TX · Member since 2018 · 2k+ posts · 2k+ votes
I’ve got a couple with sec 8. These people milk the system for years with practically free rent. I don’t blame them. Once they have a voucher, they’re set for like 15 years. 30 years if they’re elderly. I raise rent each year aggressively on them because our tax dollars covers most of the rent, not the tenant. So I don’t care how much I jack up the rent. Lol. One tenant has a college degree and gets food stamps. Yet she drives a new 50k car. Lol.
The pros are the rent is around $150-$200/month more than market rent. You get paid on time. Lol. Cons: the people are lazy and have zero work ethic causing them to take less pride in the houses.
- Honolulu, HI · Member since 2008 · 3k+ posts · 2k+ votes3yAloha,
Nobody seemed to mention that with many subsidized units, the Tenant is required to pay a small portion of the total rent our of pocket. Seems like no big deal, BUT...are you ready to file an eviction over $100? or wait 2 or 3 months until they are $300 in arrears? How much will you let them keep from you before it is worth the considerable expense and additional time of an an Eviction? And, once the Housing office is notified of the eviction, they will often stop making your "guaranteed" rent payments because the Tenant is in violation of the terms of the HAP contract. Unfortunately, the Housing office will NOT evict for you, or, at least in my experience, reimburse you for one dime of unpaid rent.
There is also the reality of the HAP annual inspections. This varies from office to office, but more often than not, anything that is damaged, broken, not functioning, missing, or has paint coming off, will need to be repaired or replaced by the Owner, and usually the Tenant is never required to pay, even if it is obvious the item was misused.
You are required to accept all of the terms of the HAP contract without negotiation, and, as with most legal documents, it favors the person/entity that drafted it. You can review the HAP contract and other documents you will be working with, including the inspection checklist and form here:
https://www.hud.gov/program_of... - Rental Property Investor · Los Angeles, CA · Member since 2020 · 32 posts · 28 votes3y
Quote from @John Morgan:
I’ve got a couple with sec 8. These people milk the system for years with practically free rent. I don’t blame them. Once they have a voucher, they’re set for like 15 years. 30 years if they’re elderly. I raise rent each year aggressively on them because our tax dollars covers most of the rent, not the tenant. So I don’t care how much I jack up the rent. Lol. One tenant has a college degree and gets food stamps. Yet she drives a new 50k car. Lol.
The pros are the rent is around $150-$200/month more than market rent. You get paid on time. Lol. Cons: the people are lazy and have zero work ethic causing them to take less pride in the houses.
Thanks for sharing John!
What's your experience like for inspections? Is the Housing Authority tough for the counties you have Section 8 rentals?
Do you mostly have in state rentals or out of state? If out of state how do you manage them?
Thanks for your input, I am gathering as much information as possible to make a move on acquiring my first property for Section 8.
- Rental Property Investor · Los Angeles, CA · Member since 2020 · 32 posts · 28 votes3y
Quote from @Douglas Gratz:
Section 8 I great but you have to be in a landlord-friendly county/city. You want to be able to evict fast and have a new section 8 tenant lines up
Thats my number 1 rule with section 8 , but overall I think its great, improves during recession ( recession proof), won't ever go away (govt) , and direct deposits...I find if you treat them good they will treat you well but you need to know when to put the foot down
Thanks for your input Douglas. I certainly want to be in landlord friendly counties for this reason. Need the law on my side lol. It does seem that enforcement needs to be at an all time high but that doesn't seem to big of an issue. Do you know if S-8 covers the full cost of the Fair Market Rents? I heard that they do not always cover the full amount on the HUD website. Is this true?
- Rental Property Investor · Los Angeles, CA · Member since 2020 · 32 posts · 28 votes3y
Quote from @Richard F.:
Aloha,
Nobody seemed to mention that with many subsidized units, the Tenant is required to pay a small portion of the total rent our of pocket. Seems like no big deal, BUT...are you ready to file an eviction over $100? or wait 2 or 3 months until they are $300 in arrears? How much will you let them keep from you before it is worth the considerable expense and additional time of an an Eviction? And, once the Housing office is notified of the eviction, they will often stop making your "guaranteed" rent payments because the Tenant is in violation of the terms of the HAP contract. Unfortunately, the Housing office will NOT evict for you, or, at least in my experience, reimburse you for one dime of unpaid rent.
There is also the reality of the HAP annual inspections. This varies from office to office, but more often than not, anything that is damaged, broken, not functioning, missing, or has paint coming off, will need to be repaired or replaced by the Owner, and usually the Tenant is never required to pay, even if it is obvious the item was misused.
You are required to accept all of the terms of the HAP contract without negotiation, and, as with most legal documents, it favors the person/entity that drafted it. You can review the HAP contract and other documents you will be working with, including the inspection checklist and form here:
https://www.hud.gov/program_of...Hey Richard! Thank you so much for this valuable information. I did not know that Housing Authority stops paying the second they are notified of an eviction in process? Are there ways to make sure tenants pay their portion? Do they generally fear missing a payment if you contact their counselor to let them know of the situation? I would assume in the situation where tenants don't pay their portion, you, the landlord, notify their counselor who will then warn the tenant that their voucher is in jeopardy if they don't comply with the contract. With this said I am sure tenants don't want to lose their voucher because once lost there is no getting it back. Does this sound right?
- Honolulu, HI · Member since 2008 · 3k+ posts · 2k+ votes3yAgain, this can vary by office, but the Tenant is supposed to follow all of the terms of the full contract. If they do not, they are in violation. If you press the issue, and notify the caseworker, it is their discretion that decides if payment will stop or not. In theory, the Tenant understands they can be removed from the program completely, but often times a life full of struggles and drama will overshadow the reality...until the Sheriff sets them out. I can't tell you how many times a Caseworker has told me they could not get in touch with the Tenant. Nearly 30 years in this business, I have not yet learned how to get Blood out of a turnip. Even so, many of those that have been in arrears had cable tv, cigarettes, beer in the fridge, and a bottle of Crown Royal on a high shelf. Just like you and I, they make choices every day. Feeling good is often more important than paying $100 of rent.
Quote from @Nathaniel K.:
Quote from @Richard F.:
Aloha,
Nobody seemed to mention that with many subsidized units, the Tenant is required to pay a small portion of the total rent our of pocket. Seems like no big deal, BUT...are you ready to file an eviction over $100? or wait 2 or 3 months until they are $300 in arrears? How much will you let them keep from you before it is worth the considerable expense and additional time of an an Eviction? And, once the Housing office is notified of the eviction, they will often stop making your "guaranteed" rent payments because the Tenant is in violation of the terms of the HAP contract. Unfortunately, the Housing office will NOT evict for you, or, at least in my experience, reimburse you for one dime of unpaid rent.
There is also the reality of the HAP annual inspections. This varies from office to office, but more often than not, anything that is damaged, broken, not functioning, missing, or has paint coming off, will need to be repaired or replaced by the Owner, and usually the Tenant is never required to pay, even if it is obvious the item was misused.
You are required to accept all of the terms of the HAP contract without negotiation, and, as with most legal documents, it favors the person/entity that drafted it. You can review the HAP contract and other documents you will be working with, including the inspection checklist and form here:
https://www.hud.gov/program_of...Hey Richard! Thank you so much for this valuable information. I did not know that Housing Authority stops paying the second they are notified of an eviction in process? Are there ways to make sure tenants pay their portion? Do they generally fear missing a payment if you contact their counselor to let them know of the situation? I would assume in the situation where tenants don't pay their portion, you, the landlord, notify their counselor who will then warn the tenant that their voucher is in jeopardy if they don't comply with the contract. With this said I am sure tenants don't want to lose their voucher because once lost there is no getting it back. Does this sound right?
Are there "good" subsidized Tenants. Sure, absolutely. But you must screen and manage very well...or just get lucky. You cannot sit back and just expect the checks to come in. There was a time when the company I worked for managed over 100 Section 8 units (and several hundred NOT Section 8). They are a LOT of work on the whole. You really need to have a realistic estimated cost for a complete Eviction process, start to finish. Legal fees vary greatly from one locale to another. When I worked for that company, our Attorney had an office one floor down from our offices, and evictions cost $75 to file, and we usually got through them for under $300. Now, here, can easily be several thousand dollars. Before cleaning and repairs.
- 3yJohn MorganPro MemberRental Property Investor · Grand Prairie, TX · Member since 2018 · 2k+ posts · 2k+ votesMine are in state. They’re only 30 min away. It depends on the inspector. Most of mine have been tough. They will find knit picky things to fail them. I expect mine to fail every time. Lol. But I get them taken care of right away if/when they fail. I think there will be more sec 8 vouchers to more and more people as market rent goes way up due to a massive rental shortage. It’s hard to find rentals under 2k/month in my area (dfw area in Texas) and many people can’t afford that plus utilities. And if we’re not charging at least $1800-$2000/month on these class C rentals, we’re losing money. So tenants are screwed and will need more assistance. Especially the ones who milk the government for freebies. Lol
Quote from @Nathaniel K.:
Quote from @John Morgan:
I’ve got a couple with sec 8. These people milk the system for years with practically free rent. I don’t blame them. Once they have a voucher, they’re set for like 15 years. 30 years if they’re elderly. I raise rent each year aggressively on them because our tax dollars covers most of the rent, not the tenant. So I don’t care how much I jack up the rent. Lol. One tenant has a college degree and gets food stamps. Yet she drives a new 50k car. Lol.
The pros are the rent is around $150-$200/month more than market rent. You get paid on time. Lol. Cons: the people are lazy and have zero work ethic causing them to take less pride in the houses.
Thanks for sharing John!
What's your experience like for inspections? Is the Housing Authority tough for the counties you have Section 8 rentals?
Do you mostly have in state rentals or out of state? If out of state how do you manage them?
Thanks for your input, I am gathering as much information as possible to make a move on acquiring my first property for Section 8.
- Real Estate Broker · Hyde Park Tampa, FL · Member since 2019 · 2k+ posts · 3k+ votes3y
Kick those folks to the curb...and the fastest way to do so without having to do any of the heavy lifting is to contact their caseworker at the Housing Authority and advise that eviction for lease term violations need to commence immediately. In some Housing Authorities, the Notice To Quit for Reasons Other Than Non-Payment of Rent (Cure Letter) is completed by the caseworker. It provides 7-days to cure or eviction begins. In reality what happens is the caseworker informs the tenant that they are going to lose their subsidy - and if they want to retain it, they need to leave. They'll even issue a new Voucher to allow them to get another place.
As I posted earlier, we've never had an issue with any Section 8 Tenant that we personally screened/selected. But the ones we inherited with a purchase were obviously nothing more than a warm body thrown in to collect rent. We got them out quickly; I personally went to the property to take photos to share with Housing (and I'm not a PM) and posted a Notice on the door. I then sent the Notice to the caseworker who said it would be handled on her end. It was; the landlord even kept the security deposit. A new Section 8 tenant was in within two weeks so no real interruption in cash flow; the neighbors were thrilled as were we. This wasn't an isolated event - we had about 3 of these inherited folks to deal with. And, that's why my recommendation is to acquire as 'vacant possession' because this chaos isn't worth it. (And, a quick story on that...a seller had the life of his children and wife threatened when he told his Section 8 client that he was selling the property and that she had to move. Police, Social Workers, Housing all intervened...and my client dodged it all by refusing to closing until the tenant was out).
I hope you'll take action to get those folks out of your property. You're a landlord/business man - not a social worker and those who are need to come and get their "clients."
Sorry you're going through this...
- Real Estate Broker · Hyde Park Tampa, FL · Member since 2019 · 2k+ posts · 3k+ votes3y
In response to your questions:
1. We require candidates (pre-application) to text/email us a copy of the front page of their Voucher that shows how much they are eligible for in terms of rent price by zip code. If their voucher is for less, we simply tell them they're not eligible to rent the property; some will offer to pay the difference on the side - and that's illegal so still a no go. By requiring the voucher upfront, you know you have someone who is eligible and for how much.
2. Fair Market Price. Two things here - look up what the maximum rent the Housing Authority is paying by zip code and room count on their webpage (normally under Landlord forms). Different Authorities have their own guidelines but HUD generally sets the payment struction. Then this: NEVER let Housing tell you what the FMP of your property is without giving them your own valuation. When they know that you know, 'adjustments' can be made - especially in markets like mine that are experiencing an epic housing shortage. There are also sites like affordablehousing.com who have a fair market calculator which gives some ammunition to your ask as well.
Be sure to know how all this works before taking the plunge. Read all the landlord materials - and know you have to complete an application to become an approved HUD Landlord and pass an inspection (at their expense). Hope this helps...
- 3yPatrick DruryBusiness MemberReal Estate Agent · Columbus, OH & Cleveland OH · Member since 2021 · 1k+ posts · 2k+ votes
@Nathaniel K.
If you are buying Section 8 rentals out of state you are going to want a property manager. I would highly recommend against managing it remotely. The only residential properties I can see working for remote management are small multi-family/ single-family in A locations. Check the forums this topic has been brought up before it never works out for people trying to manage out-of-state remotely without a Property manager. - Member since 2019 · 90 posts · 56 votes3yI acquired a quad with an inherited S8 tenant. One 1/4 units was vacant and I could not get my PM to rent it for 6 months. I switched PM companies. 7th month, 8th month vacant. PM tells me that the S8 tenant has been playing her radio loud, talking to perspective tenants about the gopher that lives under her bed. Finally the PM finds a tenant and we’re working with S8 to move her out and turn the unit.
Quote from @Nathaniel K.:
Hi everyone, I would really love to get some insights on what it is like to be an investor renting out to Section 8 tenants. I feel like this is a great way to start in real estate as a new investor considering a few factors. I would be looking into properties in the midwest and southeast states, under 100k, 3 bed, younger than 1955 and no more than 1,200 sqft, and turn key for the most part. Looking to put in 5k in rehab IF needed. I live in California so this of course would be me managing the property remotely to start (unless I can find a great property manager.) I am aware that I would need to be extra vigilant in screening tenants so they don't trash the place.
I wanted to know if anyone has any experience renting to Section 8 tenants and if you would be so kind as to share any insights/tips.
Thanks, Nathan
but hey, the S8 rent is on time!!! - Investor · Arroyo Grande, CA · Member since 2014 · 1k+ posts · 1k+ votes3y
Nathan, I'm in California up here on the Central Coast. I have a bunch of experience with section 8 as I have 12-doors in Detroit (not all section 8 though).
Shoot me a message if you want some insights.
- Rental Property Investor · Philadelphia, PA · Member since 2018 · 260 posts · 145 votes3y
Quote from @Nathaniel K.:
Quote from @Douglas Gratz:
Section 8 I great but you have to be in a landlord-friendly county/city. You want to be able to evict fast and have a new section 8 tenant lines up
Thats my number 1 rule with section 8 , but overall I think its great, improves during recession ( recession proof), won't ever go away (govt) , and direct deposits...I find if you treat them good they will treat you well but you need to know when to put the foot down
Thanks for your input Douglas. I certainly want to be in landlord friendly counties for this reason. Need the law on my side lol. It does seem that enforcement needs to be at an all time high but that doesn't seem to big of an issue. Do you know if S-8 covers the full cost of the Fair Market Rents? I heard that they do not always cover the full amount on the HUD website. Is this true?
It depends on the tenants incomes situation, some I get full and some they give me between 100-300
- Rental Property Investor · Los Angeles, CA · Member since 2020 · 32 posts · 28 votes3y
Quote from @John Morgan:
Mine are in state. They’re only 30 min away. It depends on the inspector. Most of mine have been tough. They will find knit picky things to fail them. I expect mine to fail every time. Lol. But I get them taken care of right away if/when they fail. I think there will be more sec 8 vouchers to more and more people as market rent goes way up due to a massive rental shortage. It’s hard to find rentals under 2k/month in my area (dfw area in Texas) and many people can’t afford that plus utilities. And if we’re not charging at least $1800-$2000/month on these class C rentals, we’re losing money. So tenants are screwed and will need more assistance. Especially the ones who milk the government for freebies. LolQuote from @Nathaniel K.:
Quote from @John Morgan:
I’ve got a couple with sec 8. These people milk the system for years with practically free rent. I don’t blame them. Once they have a voucher, they’re set for like 15 years. 30 years if they’re elderly. I raise rent each year aggressively on them because our tax dollars covers most of the rent, not the tenant. So I don’t care how much I jack up the rent. Lol. One tenant has a college degree and gets food stamps. Yet she drives a new 50k car. Lol.
The pros are the rent is around $150-$200/month more than market rent. You get paid on time. Lol. Cons: the people are lazy and have zero work ethic causing them to take less pride in the houses.
Thanks for sharing John!
What's your experience like for inspections? Is the Housing Authority tough for the counties you have Section 8 rentals?
Do you mostly have in state rentals or out of state? If out of state how do you manage them?
Thanks for your input, I am gathering as much information as possible to make a move on acquiring my first property for Section 8.
That certainly makes a lot of sense and is sure to drive the demand for Section 8 housing down the line. Seems like a bigger reason to dive into Section 8 investing.
- Rental Property Investor · Los Angeles, CA · Member since 2020 · 32 posts · 28 votes3y
Quote from @Patrick Drury:
@Nathaniel K.
If you are buying Section 8 rentals out of state you are going to want a property manager. I would highly recommend against managing it remotely. The only residential properties I can see working for remote management are small multi-family/ single-family in A locations. Check the forums this topic has been brought up before it never works out for people trying to manage out-of-state remotely without a Property manager.Hey Patrick, the goal is to certainly find a VERY GOOD property manager. Homework certainly needs to be done on my end to find an excellent property manager. Even then, however, I know a property manager won't care for the property to the extent I do so I guess I will turn into the property managers manager and ensure they are doing their job.
I see you are in the Cleveland area. Let's connect, Ohio is one of the states I am targeting for a Section 8 property. Talk to you soon,
Best,
Nathan
- Rental Property Investor · Los Angeles, CA · Member since 2020 · 32 posts · 28 votes3y
Quote from @Douglas Gratz:
Quote from @Nathaniel K.:
Quote from @Douglas Gratz:
Section 8 I great but you have to be in a landlord-friendly county/city. You want to be able to evict fast and have a new section 8 tenant lines up
Thats my number 1 rule with section 8 , but overall I think its great, improves during recession ( recession proof), won't ever go away (govt) , and direct deposits...I find if you treat them good they will treat you well but you need to know when to put the foot down
Thanks for your input Douglas. I certainly want to be in landlord friendly counties for this reason. Need the law on my side lol. It does seem that enforcement needs to be at an all time high but that doesn't seem to big of an issue. Do you know if S-8 covers the full cost of the Fair Market Rents? I heard that they do not always cover the full amount on the HUD website. Is this true?
It depends on the tenants incomes situation, some I get full and some they give me between 100-300
How about when it comes to utilities? I have heard that Utilities are included in the FMR, have heard that Section 8 provided an additional allowance on top of the FMR, and have even heard some landlord just pay the utilities.
- Investor · Waianae, HI · Member since 2014 · 107 posts · 42 votes3y
Hello i have been renting section 8 foe the last20 years. I have section8 in Hawaii an San Diego
both section 8 are totally different in Hawaii if a tenant does not pay their rent they eill get kick off section 8 an in San Diego if a tenant does not pay their rent nothing happens. another thing tis the section 8 inspector will have you move the smoke detector. Each inspector has different set of rules.
also, when the inspector finds fist hole in the wall they will say it' the landlord fault not the tenant's.
the reason they do this is if they leave it up the tenant to fix it will never get fixed so they hope the landlord will fix. I have had great section 8 tenants and bad section 8 tenants over all i like section 8
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